NCAN Proposes Streamlined FAFSA With Three Pathways

By Brittany Hackett, Communications Staff

A streamlined and simplified version of the FAFSA, developed and consumer-tested by the National College Access Network (NCAN), was found to be easier to use, took less time to complete, and reduced the risk of error, according to a new report.

According to NCAN’s report, the FAFSA in its current form is lengthy, complex, and often requires additional resources, placing an undue burden on students and families applying for federal financial aid. The Streamlined FAFSA NCAN developed simplifies the form by reducing the number of questions through the use of existing federal aid information and IRS data. It also guides applicants through one of three pathways depending on their financial situation.

The first pathway requires applicants to fill out as few as 20 questions and is designed for families who already receive means-tested benefits. Using this existing information, these families are able to automatically skip all financial questions and receive the maximum Pell Grant award. The second pathway is designed for families who do not receive means-tested benefits and do not have to file tax schedules with their taxes, resulting in their answering as few as 23 questions. The final pathway has as few as 25 questions and is for those who file tax schedules with their taxes.

NCAN’s Streamlined FAFSA also includes a “State Page” that collects information required by certain states for their aid programs. Applicants will only be required to fill out the State Page form for states that opt into the inclusion of the questions on the page.

According to NCAN, independent consumer-testing showed the Streamlined FAFSA resulted in less time to complete the sections related to student finances and parent demographic and financial information, and a reduction in the number of errors when applicants filled out key questions related to disclosures, demographic, and financial sections. Applicants also reported greater satisfaction and usability of NCAN’s version of the FAFSA.

If implemented, NCAN predicts that Pell Grant expenditures would increase by about $1.4 billion, about 5 percent of the Pell budget and less than 1 percent of the entire federal student aid program. “This estimated increase, which is in line with other simplification proposals, would ensure that our neediest, most vulnerable students have equal access to educational and professional opportunities,” according to NCAN.

NCAN’s proposal is similar to a model designed by a FAFSA Working Group (FWG) NASFAA convened in 2016, which also proposed a three-pathway application based on an applicant’s financial situation.

NASFAA’s FWG provided four recommendations to help streamline the federal student aid application process, the first of which was implemented by the Obama administration in the fall of 2016:

  1. Use prior-prior year (PPY) income data to determine student aid eligibility;
  2. Expand the IRS Data Retrieval Tool (DRT) to include all line items of the 1040 and W2 information;
  3. Institute a three-level application process where, after answering demographic and dependency status questions, applicants would be steered down one of three paths based on their responses; and
  4. Revise the result of the Federal Methodology to an index that ranks applicants according to their financial strength, rather than an expected financial contribution.

The three-level application offers applicants a customized set of questions, rather than sticking with a “one- size- fits- all” approach. The tiered application would identify applicants who—according to their existing means-tested benefits and tax filing status—have low presumed financial resources. It would present them with the bare minimum number of FAFSA questions as opposed to making them read through several other questions that may not apply to their circumstances or affect their aid eligibility. Families with more complex financial circumstances would have a more complicated federal application, but the use of PPY and an expanded DRT would permit more information to be directly imported from the IRS.


Publication Date: 1/12/2017

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